Nowhere is the effect of the downturn more visible than on the high streets of ordinary towns and cities. Shops and pubs are closing. Boarded-up premises punctuate high streets with dark reminders that things are not well. 

The back end of 2008 and the early weeks of 2009 saw the collapse of a swathe of major UK retailers, including Woolworths, MFI, Zavvi and Viyella. Experts predict more will follow in the coming months.

"There's going to be a constant stream of smaller ones going down and I find it difficult to believe that all of the major names will survive intact without going through some form of process," said Nick Hood, partner at insolvency specialists Begbies Traynor. "I can't see any light at the end of the tunnel before the second half of 2010."

A city like many others

Peterborough is a cathedral city in the East Midlands, with a population of 160,000. It saw a huge influx of immigrants, mostly from eastern Europe, during the country's economic boom of the last 15 years.

Peterborough City Councillor Charles Swift believes the city is closing in on itself.

Photo: Douglas Easton

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But the city is now haemorrhaging jobs. The city council laid off more than 400 staff in December. Fridge manufacturer Hotpoint made 423 redundant in November when it moved its manufacturing base to Poland. Fairline Boats laid off 360 workers.

Catalogue shopping firm Freemans put 500 out of work when it closed its Peterborough operations in January. The closure of the Woolworths chain in January - felt across Britain - put almost 300 workers from Peterborough and surrounding towns on the dole queue.

Conservative estimates point to more than 3,000 job losses since September 2008. These losses are keenly felt.

Charles Swift is the longest-serving local councillor in Peterborough. The 78-year-old  has been on the city council since 1954. He witnessed Peterborough's major growth in the 1960s and believes the city is now closing in on itself.

"If you speak the truth people tell you that you are knocking the city," he said. "But things have deteriorated. Peterborough is going backwards. Houses are standing empty because no one can buy them. You see boarded-up pubs and closed shops everywhere.

"Many of the eastern European immigrants opened shops - which are now up for sale. There is a lot of hidden unemployment, people whose businesses cannot pay them salaries.

"Crime has gone up substantially. Elderly people are being mugged. The population of this city has never experienced anything like this before."

The spectre of racism

Brian Gascoyne had two pubs in the city – which he was forced to close. He estimates more than 20 of the city's pubs served their last orders in the past six months. Photo: Douglas Easton

Photo: Douglas Easton

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Brian Gascoyne owned two pubs - one of the the mainstays of British social life - but was forced to close both down. "The pub as we know it in Peterborough is a thing of the past," he told FRANCE 24. "We will see an awful lot more closures in the next months."

The economy is creating tension among the town's multicultural population, Gascoyne believes. "Because of the recession, racism is rearing its ugly head, I'm afraid. When everything's going well no one cares," he said, adding that one of his pubs was in a neighborhood where more than 100 different languages are spoken.

Now, he says, "There is tension. Peterborough is not quite simmering, but it is not far off it. The next couple of years will be very telling."

Hope?

But Gascoyne is optimistic the city will pull through. In the last 20 years many new businesses established themselves in Peterborough and he believes there is a broad enough base for the city to get back on its feet once the economy begins to recover.

John Bridge, head of Peterborough's Chamber of Commerce is, perhaps predictably, upbeat about the city's future.

"Everyone is going to take a few knocks during this recession," he said. "And the large number of redundancies in the last six months has been a big upset. But Peterborough does attract new investment and the city would have had significant problems filling jobs in the last few years had it not been for the immigrant community.

"Yes, pubs have closed, but new clubs have opened. There are positive signs, and only time will tell."

But with experts predicting no recovery for at least 18 months,  things will get worse for Peterborough before they get better.